Lebanese state news agency reports that the government has raised the price of fuel by around 25%
BEIRUT – The Lebanese government on Wednesday increased the price of fuel by around 25%, the National News Agency reported, effectively removing all subsidies on petroleum products and setting them at market price amid worsening conditions of the economic crisis.
The new increase brings the price of 20 liters (5 gallons) of 98 octane gasoline to 312,700 Lebanese pounds, nearly half the monthly minimum wage. The spike is also affecting cooking gas and diesel fuel used for heating, pointing to a cold winter ahead.
“Indeed, the subsidies have been permanently removed from fuel,” said Georges Brax, spokesperson for the Syndicate of Service Station Owners in Lebanon. He said the new prices were calculated at the black market rate.
“There are no more subsidies from the central bank or state coffers,” he said, adding that global fuel prices had also increased, which had an impact on prices in the country. Lebanon.
The increase has sparked limited protests in Beirut, southern and northern Lebanon and calls for an increase in the minimum wage. Living conditions continue to deteriorate in Lebanon as the small country, once a middle-income nation, sinks deeper into an economic crisis that has already plunged more than half of the population into poverty.
A government plan for a social safety net has yet to materialize in the country, which now depends on international financial assistance.
Lebanon, a country of 6 million people, including Syrian refugees, struggles with fuel, medicine and basic commodity shortages as foreign supplies dwindle and the economy shrinks. The national currency is in free fall, losing more than 90% of its value.
A new government took office last month after nearly a year of political deadlock that has only deepened the economic crisis, described by the World Bank as one of the worst in the world in the past 150 years.
In recent weeks, the government has gradually lifted subsidies, bringing prices closer to market prices.
The new government’s priority is to lift subsidies and start negotiating with the International Monetary Fund for a stimulus package. On Tuesday, Prime Minister Najib Mikati said the government had started devising a reform plan to prepare for talks with the IMF. He hoped that the talks would lead to results by the end of the year. Lebanon defaulted on its external debt for the first time in March last year and previous talks with the IMF have collapsed.
The Lebanese currency, pegged for 30 years to the dollar at 1,500 Lebanese pounds for $ 1, oscillates at about ten times that rate on the black market. This week, it was trading closer to 20,000 Lebanese pounds to the dollar.
Brax predicted that there would be no more major changes in the price of fuel. “God helps the people. … Their purchasing power has collapsed, ”he said, adding that further price hikes would affect the prices of most commodities.
He urged the government to speed up its plans to distribute financial assistance to families in need. “Everything is still chatty,” he said.